Facts and opinions related to the reprographics business and the reprographics industry as well as articles and information related to the A/E/C industry served by reprographers. This blog is intended for reprographers, for vendors who sell to reprographers and for analysts and investors who are interested in learning more about the reprographics industry. (YOU CAN CONTACT THE BLOG AUTHOR at joel.salus@mac.com or at joel.salus@me.com)

Tuesday, July 15, 2014

I just finished reading some reports that
were very recently filed by Service Point Solutions, SA with the CNMV (Spain’s equivalent of the U.S. SEC.) The reports are all in Spanish, and I used Google-Translate in an attempt
to figure out what they said. Not
easy to do, because Google-Translate translations are not perfect!

What we already know to have happened in the
SPS matter (I guess I
should say, “debacle”, rather than say “matter”, for what’s happened to SPS
has, most certainly, been a mess), which,
for all intents and purposes, began in October 2013:

In
late October 2013, SPS’ lenders took control of the holding company that owned
SPS’ business units in the UK (SP UK), in Norway (Allkopi) and in Sweden
(Holmbergs.)

In November,
SP US – was shut down.I still don’t
know “who” gave the order to shut down SP US.SP US’s assets were later sold to The Color Company.

In February,
2014, SPS took itself and its remaining business units into bankruptcy
reorganization.

After
reading the most recent documents filed by SPS with the CNMV, these, apparently, are the “latest
developments” in the Service Point Solutions, SA matter:

Paragon
Group has become SPS, SA’s largest shareholder (with some 12.4% of SPS, SA’s
outstanding shares); this, apparently, was accomplished by Paragon Group
purchasing $10 mil of SPS SA’s convertible debt (bonds) and then converting
that debt to SPS, SA shares.In essence,
this transaction puts Paragon Group in control of “the rest” of SPS, SA’s
business units (the units that were not previously acquired by The Color
Company, Mimeo.com or by Paragon Group.)

It is
planned that SPS, SA’s shares will resume trading sometime in September or
October.(Trading was halted in – I
think it was – February.)

As to the
creditors of SPS, SA, it looks like this is what’s going to happen.(I would think that this is a proposal at
this point, one that has to be approved by the BK court, before it becomes
binding. But, it could well be that the
BK court has already approved this plan.)

Liens
– apparently, 20% of the debt will be extinguished, with the remaining 80%
converted to ownership in SPS shares.

Ordinary loans - apparently, 60% of the debt will be
extinguished, with the remaining 40% converted to ownership in SPS shares.

Subordinated loans - apparently, 60% of the debt will be
extinguished, with the remaining 40% converted to ownership in SPS shares.

Please NOTE
that, where I’ve said that debts will be “extinguished”, I might have misinterpreted what was said in the report.It could be that the debts are NOT going to
be extinguished and that creditors will be paid in cash (or notes.)One thing is for certain, that being that
creditors will end up owning a good portion of SPS SA’s shares.)

In one of the reports, this is said about the Paragon
Group…..

“In 2013, it had Sales of 161 Million Euros and EBITDA of
11 Million Euros.”

In 2014, Paragon will report sales a lot greater than that, due to its
aggressive moves in 2014 to buy SP UK, SP Norway, SP Sweden and a good slug of
SPS SA’s shares.

Early on in
this debacle, where I was referring to statements in SPS reports that so much
as said SPS SA was attempting to negotiate, to reorganize and to keep all of
its business units together …..

Humpty Dumpty sat on a wall,

Humpty Dumpty had a great fall.

All the king's horses and all the king's men

Couldn't put Humpty together again.

Well, as it has played out, Paragon Group has picked
up most of the pieces!The only pieces
that remain “not picked up” by Paragon Group include SP US and SP Germany.So, will we later see The Color Company sell
(what remains of) SP US to Paragon Group?And, will we later see Mimeo.com sell SP Germany to Paragon Group?If both of those happen, I’ll have to eat crow!

Archive of Blog-posts on Repro 101 when Repro 101 was hosted on IRgA web-site

To access the archive of blog posts that were put up on Reprographics 101 when Repro 101 was hosted on the IRgA web-site, go to the blog-post put up on May 31st, 2013, and, when you locate that blog-post, you will find a list of the pdf files that contain those previous blog-posts, as well as "links" to each pdf file.

About Me

40+ year involvement in the reprographics business and industry. Former Chairman/CEO of Rowley-Scher Reprographics, Former Senior Vice President & Chief Business Strategist of National Graphic Imaging (NGI). Former Managing Director of the International Reprographics Association (IRgA). Active as a Management Consultant to firms in the reprographics business. (My consulting practice is called ProActive Management Programs LLC.)